Malawi dairy farmers staring at losses as top buyer suspends operation

MALAWI – Malawian dairy farmers, especially from the Central Region are struggling to find a market for their milk after the country’s main milk collector, Malawi Dairy Industry (MDI), suspended its operations.

The Malawi Milk Producers Association national director Herbert Chagona confirmed that the development has left more than 5 000 dairy farmers in Dowa, Lilongwe, and Mchinji districts stranded with their milk as there is no off-taker for the produce.

“Over the past two weeks, the farmers have lost more than 18 000 liters of milk, losing more than K6 million in revenue because of non-collection of milk by the Malawi Dairy Industry. This is affecting their households,” he said.

“This has aggravated the hardships farmers are going through, as farmers have also gone for five months without being paid for the milk the company had collected from the milk-bulking groups.”

Malawi Dairy Industry has been experiencing intermittent electricity supply, as reported by the association’s director Mr. Chagona.

He noted that as a result; they have ended up throwing out thousands of liters of milk, reducing cash flow and causing a scarcity in some other areas.

In the meantime, Chagona said the association is engaging in small-scale processors, but cannot absorb all the milk.

Demand for milk, butter, cheese, yogurt, and ice cream tends to grow out of proportion to income as the countries advance from low to middle income and as populations urbanize.

Chagona said the production capacity for the sector is at around 40 percent for all the seven milk processors in the country, including MDI, an indication that the country has potential.

Malawi Dairy Industry Managing Director Bob Dzombe added that the firm, which was previously collecting about 1000 liters of milk per day against their 90 000 liters processing capacity, is operating at a loss due to power challenges.

On average, milk fetches about K250 per liter while diesel costs K1 920 per liter. The data shows that the firm was spending about K230 400 on diesel to process milk valued at K250 000.

“People are failing to feed the cows for milk. As a result, they are failing to produce more milk,” said Dzombe.

“For over one year since the country started experiencing power challenges, we have been using more fuel just to process 1 000 liters.”

Data from the 25 000-member association reveals that, in 2022, Malawi produced 53 million liters of milk.

Meanwhile, data from the World Health Organisation (WHO) show that Malawi has the lowest consumption of milk per capita in Africa, estimated at four to six kilograms (kg).

This is below the African continent’s average of 15kg per capita and is also lower than the 200kg per capita recommended by the WHO.

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